Friday, September 02, 2005

Hundreds Of Fast-Food Restaurants Closed by Hurricane Katrina

More than 200 McDonald's Corp. (MCD) restaurants remained dark in the storm's path as of midday Wednesday. Burger King Corp. said about 120 of the 180 restaurants initially hit were still closed.

"We're assessing damage to our restaurants, but transportation, power and the lack of communication make it difficult," said McDonald's pokesman Bill Whitman.

McDonald's has dispatched an assessment team to the Gulf Coast to "get a firsthand account of what we need to do to help our people as well as others in the disaster area," he said. The company also has contacted the American Red Cross, although Whitman indicated that McDonald's hadn't determined what assistance it might render.

"Our first priority is to locate all of our employees and insure their safety," he said.After the Sept. 11, 2001 attack on New York City, the chain trucked in food and water to the Ground Zero area, for residents as well as those involved in rescue and recovery.

Burger King has marshaled a half dozen semitrailer trucks loaded with everything from canned goods and water to bug spray and diapers to assist those in what a spokeswoman called "the Burger King family." That would include franchisees - most of the restaurants along the Gulf Coast are franchised – and their employees.

Those trucks are "staged" and waiting for word that it is safe to enter the storm's zone."We also will provide cash assistance" for emergency housing and similar basic needs, said Edna Johnson, a senior vice president at the Miami-based hamburger chain.

More than 4,000 restaurant workers have been affected by the storm, she said, adding that "we're still trying to account for all" of them.

Because of operating difficulties and disrupted supply lines, many of the Burger Kings operating in the ravaged areas of Louisiana, Mississippi, Alabama and Florida were serving a limited menu.

Johnson said at last count 57 Burger Kings were closed in Louisiana, 52 in Mississippi, 15 in Alabama and six in the Miami area.

Among restaurants hardest-hit in and around swamped New Orleans was AFC Enterprises Inc.'s (AFCE) Popeyes Chicken & Biscuits chain, which has 43 stores in that market, according to the company's Web site. It also has eight restaurants in and around Biloxi, Miss. All told, Popeyes operates at 153 locations in Louisiana and 56 in Mississippi.

Popeyes spokeswoman Alicia Thompson said the Atlanta company was pulling together information on the situation and couldn't elaborate.

"With so many employees in the New Orleans market we've been making sure they're OK," she said. "Now we're starting to assess, as much as we can, where we are."

Other chains hit by Katrina's fury include Sonic Corp. (SONC), which said it has about 60 drive-ins affected in Louisiana, Mississippi and Alabama. A spokeswoman said the Oklahoma City company was seeking to determine the extent of damage and wasn't prepared to comment further. Sonic has about 3,000 stores nationwide.

There was no immediate word on storm damage to restaurants in the Yum Brands Inc. (YUM) portfolio, which include KFC, Pizza Hut, Taco Bell, A&W and Long John Silver's.

Unlike some other retailers that may be able to eventually capture sales postponed because of the storm, restaurants have no such opportunity. Once a meal period is passed, revenue is lost, and so an economic impact is inevitable for franchisers and their franchisees, who pay a percentage of every sales dollar rung up.